Universities will benefit from a raft of measures announced in chancellor Gordon Brown’s budget designed to boost research, innovation and the knowledge economy.
With a £23 billion projected surplus this year, the chancellor was in bullish pre-election mode, announcing a series of tax relief measures that will benefit university-business links.
Mr Brown also signalled a continued commitment to higher education with his projection that the country will need an extra 2.5 million employees with degrees or higher degrees by 2004.
The chancellor announced:
- The abolition of the minimum funding requirement for investment managers, to encourage them to put cash into venture capital
- A new tax relief on intellectual property and goodwill
- Extension of research and development tax credit to larger companies
- A new tax credit for pharmaceutical companies to accelerate research on diseases plaguing the developing world, such as Aids, malaria and tuberculosis
- Consideration of a new tax credit for workplace training
- Long-term capital gains tax rate for all employees in all types of companies cut from 40p to 10p
- Doubling of the number of shares options to £3 million, available to all employees
- £2,000-worth of help from the Small Business Service for start-up companies
- Simplification of VAT for small businesses, benefiting 500,000 firms
- Simplification of small business corporate tax
- Greater financial flexibility for Regional Development Agencies
- VAT law changed to allow free museums
- Increase in the number of modern apprenticeships from 220,000 to 320,000
- £1 billion more for schools including £200 million more for recruitment and retention of teachers.
Baroness Warwick, chief executive of Universities UK, said: “We are pleased that the chancellor has listened to what the UK’s universities have been saying about the importance of R&D to the UK’s economy.”
She urged the government to go a stage further and invest in university teaching by acting on the Taylor report on university funding.
Peter Cotgreave, director of the Save British Science Society lobby group, welcomed the incentives for pharmaceutical companies and venture capitalists but said he was disappointed that there was no incentive to encourage companies to join in the science Research Investment Fund.